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Thursday, March 10, 2011

Air Canada Plays Hockey

Yesterday, Air Canada sent letters to all 6 Canadian NHL teams expressing concern about the recent number of on-ice incidents that have made headlines in the hockey world. The letters came the day after Boston Bruins star ZdenoChera hit a Montreal Canadiens player, leaving him with a fractured vertebrae and a severe concussion. Air Canada was quoted as saying:

“While we support countless sports, arts and community events, we are having difficulty rationalizing our sponsorship of hockey unless the NHL takes responsibility to protect both the players and the integrity of the game.”

As owner of the naming rights to Toronto’s Air Canada Center and major corporate sponsor of the 6 Canadian NHL teams, Montreal-based Air Canada is clearly exercising their power to influence the NHL.

I find this story fascinating for a number of reasons:

First, part of the explanation for Air Canada’s move could be attributed to an increasing pressure on companies to extend their responsibility beyond economic and legal obligations. As Denis Vandal, Air Canada’s director of marketing and communications said:

“From a corporate social responsibility standpoint, it is becoming increasingly difficult to associate our brand with sports events which could lead to serious and irresponsible accidents; action must be taken by the NHL before we are encountered with a fatality.”

Many companies, in an attempt to save face in the public’s eye, have exercised their power as sponsors to proactively influence their partners to change behavior.

Second, and perhaps more skeptically, we should be careful to prematurely label Air Canada as a valiant hero before thinking about some of the absurdities of this move. Notice in the first quotation that Air Canada thinks they are positioned to make judgments on what is best for the “players and integrity of the game”. Has Air Canada recently announced a diversification strategy into the world of professional sports? I’m not sure if there are many capabilities used in operating an airline that could be transferred to informing the rules of a professional sport.

Third, this is another example of a company getting involved in public affairs that have nothing to do with their core business. Like Google’s efforts to eliminate censorship in China or Visa’s attempts to weaken WikiLeaks by cutting off their funding supply, Air Canada is attempting to use its powerful position to influence NHL rules. Whether or not Air Canada is correct in their stance is irrelevant next to the fact that business’ dominating role in society is allowing them to get involved in the public domain at an unprecedented level, without any shred of expertise, and, most importantly, guided by a uni-dimensional motivation of profitability, which we know doesn’t have the best track record for aligning with society’s interests.

Fourth, I question Air Canada’s motives. While it is the responsibility of companies to manage future risk, I find it very hard to believe that Air Canada’s reputation could be damaged in a society where hockey defines its culture. Does the location of Air Canada’s headquarters - Montreal - mean anything here (home team of the victim of yesterday’s incident)? Ironically, while Air Canada is playing the CSR card in explaining their actions, the fact that they seem to be responding rashly over an incident that impacted their home team smells of conflict of interest and irresponsibility.

Finally, I’ll end with a criticism to those who would argue that Air Canada should keep its nose out of these sorts of things. In the early 1980s, the organizing committee for the Olympic Games in Los Angeles made an unprecedented move when they funded part of the 1984 Games with corporate sponsorship. 20 years later, the Sydney organizing committee solicited $1 Billion in sponsorship to fund 50% of the budget. Over these 2 decades, we’ve seen an unprecedented level of corporate funding for a range of individuals, organizations, and events both within and outside the sporting industry. Public educational institutions in the US are turning to corporations to reduce budget deficits through marketing in schools and funding of different programs.

How can we expect to benefit from this lucrative pot of money without sustaining some consequences. If we want the luxury of fat corporate funds to run these events, teams, organizations and venues, then we have to be prepared to accept their active role…experts or not. Perhaps the bigger question is not whether Air Canada has a right or should be able to influence the NHL but instead whether we made decisions that permitted corporate sponsorship in haste without thinking through how this trend would subsequently lead to increased corporate involvement in activities held sacred by public interests.